RAVI SHROFF,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX - 25(3), MUMBAI, BANDRA (EAST), MUMBAI

ITA 4186/MUM/2023Status: DisposedITAT Mumbai07 November 2025AY 2015-16Bench: SHRI PAWAN SINGH (Judicial Member), SHRI PRABHASH SHANKAR (Accountant Member)10 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the sale of shares constituted a capital gain and not business income. It noted that the assessee held a small percentage of shares and was not involved in the company's management, differentiating it from precedents where gains were treated as business income. The Tribunal also directed the AO to recalculate the sale consideration.

What were the facts?

The assessee sold shares of Hyderabad Chemicals Limited (HCL) held for 35 years. The Assessing Officer (AO) treated the consideration received as business income, while the assessee claimed it as capital gains. The AO's action was upheld by the CIT(A).

What were the issues?

Whether the consideration received from the sale of long-held shares is taxable as capital gains or business income, and the applicability of Section 28(va) to the transaction.

Which sections of the Income-tax Act were involved?

Section 28(va),Section 54F,Section 54EC,Section 234B,Section 234C

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IN THE INCOME TAX APPELLATE TRIBUNAL, ‘D’ BENCH MUMBAI BEFORE: SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER (Physical hearing) B-15,Theosophical Society, Tax- Circle 32(1), Mumbai, Juhu Road, Juhu, Kautilya Bhavan, Bandra-Kurla Mumbai- 400049 Complex, Bandra (East), Mumbai- 400051 PAN: AAZPS 0268 D (Appellant) .. (Respondent)

Assessee by Shri Nitesh Joshi, Advocate Revenue by Shri Umashankar Prasad, CIT-DR Date of Hearing 20/08/2025 Date of Pronouncement 07/11/2025

Order under section 254(1) of Income Tax Act

PER PAWAN SINGH, JUDICIAL MEMBER:

1.

This appeal by the assessee is directed against the order of NFAC/Learned

Commissioner of Income Tax [Ld. CIT(A)] dated 22.09.2023 for A.Y. 2015-16. The assessee in its appeal has raised following ground of appeal:-

“Based on the facts and circumstances of the case, the Appellant respectfully craves to prefer an appeal against the order dated 22 September 2023 passed under section 250 of the Income-tax Act, 1961 (the Act), by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [CIT(A)] in respect of the appeal filed agains

The order continues below.

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